Under the Declaratory Judgment Act, if you are threatened with a patent infringement suit, you can file a "Declaratory Judgment" action to get the court to declare the rights and settle the matter. The MedImmune decision made it easier for licensees to challenge the validity of patents they had previously licensed with a DJ action.

See The Scream, for a recent example: in this case, a potential infringer failed in its attempt to to institute a declaratory judgment action:

"Prasco got so paranoid about infringing patents from competitors Medicis Pharmaceutical and Imaginative Research Associates that it filed a declaratory judgment motion. The problem for Pasco was that Prasco wasn't even on the defendants' radar screens. The district court pitched the case, and the appeals court concurred."

So here's my proposal. I welcome any comments:

The Declaratory Judgment Act should be expanded to make it easier for potential infringers to bring an action against a patentee if there is any doubt by the potential infringer. For example, if A is worried about violating B's patent, A could request B to provide a written exoneration statement that it does not intend to sue A or request a license, for a given product. If B does this, B is estopped from ever suing A for patent infringement with respect to that product--B waives his right. If B refuses to provide the statement within 30 days (say), then A has a right to seek a DJ. Better yet A provides B a description of its product and demands an exoneration statement; if B does not provide one, it releases its right to sue A. This would give B 30 days to decide whether to admit to A that it intends to sue. If it makes this admission, this triggers A's right to seek a DJ.

One person I ran this by asked why the patentee can't just always reply with a ridiculously high license offer. The answer is: because that opens the patentee to a DJ action. The patentee would have a dilemma: say no, and give up the right; or say yes, and be (maybe) sued. To my mind, this puts them in the same position as potential infringers: potential infringer never knows when the patentee might simply decide to sue him... or not. If he does, the accused infringer could face millions in legal fees. So he has to sit there, hoping not to get sued.

In my proposed system, the potential infringer can turn the tables: give the patentee, who after all is sitting on a legal right to intimidate--give him a choice, make him decide whether he will use it or not. At least say "maybe", and give the infringer the right to sue for DJ. So the patentee is not ready for such a suit? He can't handle it? Aww, poor patentee, sitting there at the mercy of potential infringers. Just like they are at his mercy!

A patent attorney friend comments:

"Interesting idea - allow the potential infringer to create the "case or controversy" with its request for exoneration rather require some act by the patent holder. Wouldn't this effectively allow Federal Courts to give advisory opinions on patent infringement? I guess you could argue that there is still a "case or controversy" under Article III. I think the potential infringers could abuse such a procedure by burying the patent holders with requests for multiple products or variations of products and by referring to multiple patents. Then again, patent holders can (and do) abuse our current system by threatening and asserting multiple patents against potential infringers."

This would not prevent very large powerful patent holders from rejecting offers. They have more ability to hold out and potentially win a DJ decision. Right? Nathanael Snow

"This would not prevent very large powerful patent holders from rejecting offers. They have more ability to hold out and potentially win a DJ decision. Right?"

Well, there is a reason patentees fight off DJ actions when they are brought: they don't want them. THey don't get to control the turf, or the timing. They coudl reject offers, but this would trigger the right of the potential infringer to file a DJ--if they want to.